By a one-vote margin, the U.S. Senate passed an omnibus five-year budget reconciliation package cutting $39.7 billion from government programs over five years. Included are $2.72 billion in ag-program cuts. The House was to vote on reconciliation in January.

The Senate Ag Committee cuts include:

• No across-the-board cuts for commodity programs.

• Advance direct payments reduced to 40% for crop year 2006; further reduced to 22% in crop year 2007.

• Cotton Step 2 program terminated Aug. 1, 2006.

• Milk Income Loss Contracts — dairy support program is extended two years.

• EQIP extended to 2010, funds reduced $1.27 billion for fiscal years 2007-2009, and $1.3 billion in year 2010.

• Extend Conservation Security Program to 2011; funds capped $1.954 billion for fiscal years 2006-2010, and $5.65 billion fiscal years 2006-2015.

• Watershed Rehabilitation program — cancellation of funds available prior to Oct. 1, 2006.

• Renewable Energy Program — limit fiscal year 2007 funds to $3 million.

• Cancel all unspent funds prior to Oct. 1, 2006, for the Value-Added Grant Program, Rural Business Investment Program, Rural Business Strategic Investment Grant Program, and Rural Firefighters Grant Program.

• Cancel unspent funds for fiscal years 2007-2009 for the Initiative for Ag and Food Systems.